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XYZ Corporation evaluates two projects. Projects x and y; the below table shows their cash flows. These projects are mutually exclusive, equally risky and are not repeatable. If the decision is made by choosing the Project with the higher IRR, how much value will be forgone? Wacc %8   0 1 2 3 4 CF(X) ($1,050) $675 $650     CF(Y) ($1,050) $360 $360 $360 $360 IRR of Project X: %17 IRR of Project Y: %14 NPV of Project X: $132 What are: a. NPV of Project Y: $............ b. The Value forgone: $..............

XYZ Corporation evaluates two projects. Projects x and y; the below table shows their cash flows. These projects are mutually exclusive, equally risky and are not repeatable. If the decision is made by choosing the Project with the higher IRR, how much value will be forgone? Wacc %8   0 1 2 3 4 CF(X) ($1,050) $675 $650     CF(Y) ($1,050) $360 $360 $360 $360 IRR of Project X: %17 IRR of Project Y: %14 NPV of Project X: $132 What are: a. NPV of Project Y: $............ b. The Value forgone: $..............

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 2CMA: Staten Corporation is considering two mutually exclusive projects. Both require an initial outlay of...
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XYZ Corporation evaluates two projects. Projects x and y; the below table shows their cash flows. These projects are mutually exclusive, equally risky and are not repeatable. If the decision is made by choosing the Project with the higher IRR, how much value will be forgone? Wacc %8

  0 1 2 3 4
CF(X) ($1,050) $675 $650    
CF(Y) ($1,050) $360 $360 $360 $360

IRR of Project X: %17

IRR of Project Y: %14

NPV of Project X: $132

What are:

a. NPV of Project Y: $............

b. The Value forgone: $..............

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